61968J0014

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1 . EEC - COMMUNITY LEGAL SYSTEM - SPECIAL NATURE - STATUS IN RELATION TO NATIONAL LEGAL SYSTEMS - SUPREMACY OF RULES OF COMMUNITY LAW

2 . POLICY OF THE EEC - COMPETITION RULES - CARTELS - PARALLEL ACTION BY COMMUNITY AND NATIONAL AUTHORITIES - PERMISSIBLE SUBJECT TO OBSERVANCE OF COMMUNITY LAW - REQUIREMENT OF NATURAL JUSTICE IN THE EVENT OF CONCURRENT APPLICATION OF COMMUNITY AND NATIONAL SANCTIONS

( EEC TREATY, ARTICLE 85(1 ); ARTICLE 87(2 ))

3 . EEC TREATY - PRINCIPLES - DISCRIMINATION ON GROUNDS OF NATIONALITY - PROHIBITION - DISPARITY OF TREATMENT RESULTING FROM DIFFERENCES BETWEEN NATIONAL LEGISLATIVE SYSTEMS NOT REFERRED TO

( EEC TREATY, ARTICLE 7 )

1 . THE EEC TREATY HAS ESTABLISHED ITS OWN SYSTEM OF LAW, INTEGRATED INTO THE LEGAL SYSTEMS OF THE MEMBER STATES, AND WHICH MUST BE APPLIED BY THEIR COURTS . IT WOULD BE CONTRARY TO THE NATURE OF SUCH A SYSTEM TO ALLOW MEMBER STATES TO INTRODUCE OR TO RETAIN MEASURES CAPABLE OF PREJUDICING THE PRACTICAL EFFECTIVENESS OF THE TREATY .

THE BINDING FORCE OF THE TREATY AND OF MEASURES TAKEN IN APPLICATION OF IT MUST NOT DIFFER FROM ONE STATE TO ANOTHER AS A RESULT OF INTERNAL MEASURES LEST THE FUNCTIONING OF THE COMMUNITY SYSTEM SHOULD BE IMPEDED AND THE ACHIEVEMENT OF THE AIMS OF THE TREATY PLACED IN PERIL .

CONSEQUENTLY, CONFLICTS BETWEEN THE RULES OF THE COMMUNITY AND NATIONAL RULES MUST BE RESOLVED BY APPLYING THE PRINCIPLE THAT COMMUNITY LAW TAKES PRECEDENCE .

2 . SO LONG AS A REGULATION ADOPTED PURSUANT TO ARTICLE 87(2)(E ) OF THE TREATY HAS NOT PROVIDED OTHERWISE, NATIONAL AUTHORITIES MAY TAKE ACTION AGAINST AN AGREEMENT IN ACCORDANCE WITH THEIR NATIONAL COMPETITION LAWS, EVEN WHEN AN EXAMINATION OF THE AGREEMENT FROM THE POINT OF VIEW OF ITS COMPATIBILITY WITH COMMUNITY LAW IS PENDING BEFORE THE COMMISSION, SUBJECT HOWEVER TO THE CONDITION THAT THE APPLICATION OF NATIONAL LAW MUST NOT PREJUDICE THE FULL AND UNIFORM APPLICATION OF COMMUNITY LAW OR THE EFFECTS OF MEASURES TAKEN TO IMPLEMENT IT . IF THE EXISTENCE OF PARALLEL PROCEDURES ENTAILS CONSECUTIVE SANCTIONS, A GENERAL REQUIREMENT OF NATURAL JUSTICE DEMANDS THAT ANY PREVIOUS PUNITIVE DECISION MUST BE TAKEN INTO ACCOUNT IN DETERMINING ANY SANCTION WHICH IS TO BE IMPOSED .

3 . ARTICLE 7 OF THE EEC TREATY WHICH PROHIBITS EACH MEMBER STATE FROM APPLYING ITS LAW DIFFERENTLY ON THE GROUND OF THE NATIONALITY OF THE PARTIES CONCERNED WITH THE DISPARITIES IN TREATMENT OR THE DISTORTIONS WHICH MAY RESULT, FOR PERSONS AND UNDERTAKINGS SUBJECT TO THE JURISDICTION OF THE COMMUNITY, FROM DIVERGENCES EXISTING BETWEEN THE LAWS OF THE VARIOUS MEMBER STATES, PROVIDED THAT THESE AFFECT ALL PERSONS SUBJECT TO THEM IN ACCORDANCE WITH OBJECTIVE CRITERIA AND WITHOUT REGARD TO THEIR NATIONALITY .

IN CASE 14/68

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE KAMMERGERICHT ( KARTELLSENAT ), BERLIN, FOR A PRELIMINARY RULING ON THE INTERPRETATION OF THE EEC TREATY, IN PARTICULAR ARTICLES 5, 7 AND 85, AND ALSO OF REGULATION NO . 17 OF THE COUNCIL OF 6 FEBRUARY 1962, IN PARTICULAR ARTICLE 9, IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

1 . WALT WILHELM, DIRECTOR OF FARBENFABRIKEN BAYER AG, HAHNWALD, HASENGARTEN 31,

2 . HANS GOELZ, DIRECTOR OF CASSELLA-FARBWERKE MAINKUR AG, FRANKFURT-AM-MAIN, HAMMANNSTRASSE 6,

3 . HANS ULRICH FINTELMANN, SALES MANAGER OF FARBWERKE HOECHST AG, FRANKFURT-AM-MAIN-HOECHST, FARBWERKE HOECHST AG,

4 . BADISCHE ANILIN - UND SODA-FABRIK AG, LUDWIGSHAFEN AM RHEIN,

5 . FARBENFABRIKEN BAYER AG, LEVERKUSEN,

6 . FARBWERKE HOECHST AG, FORMERLY MEISTER LUCIUS UND BRUENING, FRANKFURT-AM-MAIN-HOECHST,

7 . CASSELLA FARBWERKE MAINKUR AG, FRANKFURT-AM-MAIN-FECHENHEIM,

AND

BUNDESKARTELLAMT, BERLIN,

BY ORDER OF 18 JULY 1968, WHICH REACHED THE REGISTRY OF THE COURT OF JUSTICE ON 25 JULY 1968, THE KAMMERGERICHT ( KARTELLSENAT ), BERLIN, A COURT HAVING JURISDICTION IN THE FEDERAL REPUBLIC OF GERMANY IN THE MATTER OF CARTELS, REFERRED TO THE COURT OF JUSTICE FOUR QUESTIONS UNDER ARTICLE 177 OF THE TREATY ESTABLISHING THE EEC FOR AN INTERPRETATION OF ARTICLES 3(F ), 5, 7 AND 85 OF THE EEC TREATY, AS WELL AS OF ARTICLE 9 OF REGULATION NO 17 OF THE COUNCIL OF 6 FEBRUARY 1962 .

I - THE FIRST AND THIRD QUESTIONS

IN THE FIRST QUESTION THE NATIONAL COURT ASKS WHETHER, WHEN A PROCEDURE HAS ALREADY BEEN INITIATED BY THE COMMISSION UNDER ARTICLE 14 OF REGULATION NO 17 OF 6 FEBRUARY 1962, IT IS COMPATIBLE WITH THE TREATY FOR THE NATIONAL AUTHORITIES TO APPLY TO THE SAME FACTS THE PROHIBITIONS LAID DOWN BY THE NATIONAL LAW ON CARTELS . THIS REQUEST IS ELABORATED IN PARTICULAR IN THE THIRD QUESTION, RELATING TO THE RISK OF A DIFFERENT LEGAL ASSESSMENT OF THE SAME FACTS AND TO THE POSSIBILITY OF DISTORTIONS OF COMPETITION IN THE COMMON MARKET TO THE DETRIMENT OF THOSE SUBJECT TO THE SAID NATIONAL LAW . IN THIS RESPECT REFERENCE IS MADE TO ARTICLE 9 OF REGULATION NO 17, TO ARTICLES 85, 3(F ) AND 5 OF THE EEC TREATY AND TO THE GENERAL PRINCIPLES OF COMMUNITY LAW .

3 ARTICLE 9(3 ) OF REGULATION NO 17 IS CONCERNED WITH THE COMPETENCE OF THE AUTHORITIES OF THE MEMBER STATES ONLY IN SO FAR AS THEY ARE AUTHORIZED TO APPLY ARTICLES 85(1 ) AND 86 OF THE TREATY DIRECTLY WHEN THE COMMISSION HAS TAKEN NO ACTION OF ITS OWN . THIS PROVISION DOES NOT APPLY WHERE THE SAID AUTHORITIES ARE ACTING IN PURSUANCE NOT OF THE SAID ARTICLES BUT ONLY OF THEIR INTERNAL LAW . COMMUNITY AND NATIONAL LAW ON CARTELS CONSIDER CARTELS FROM DIFFERENT POINTS OF VIEW . WHEREAS ARTICLES 85 REGARDS THEM IN THE LIGHT OF OBSTACLES WHICH MAY RESULT FOR TRADE BETWEEN MEMBER STATES, EACH BODY OF NATIONAL LEGISLATION PROCEEDS ON THE BASIS OF THE CONSIDERATIONS PECULIAR TO IT AND CONSIDERS CARTELS ONLY IN THAT CONTEXT . IT IS TRUE THAT AS THE ECONOMIC PHENOMENA AND LEGAL SITUATIONS UNDER CONSIDERATION MAY IN INDIVIDUAL CASES BE INTERDEPENDENT, THE DISTINCTION BETWEEN COMMUNITY AND NATIONAL ASPECTS COULD NOT SERVE IN ALL CASES AS THE DECISIVE CRITERION FOR THE DELIMITATION OF JURISDICTION . HOWEVER, IT IMPLIES THAT ONE AND THE SAME AGREEMENT MAY, IN PRINCIPLE, BE THE OBJECT OF TWO SETS OF PARALLEL PROCEEDINGS, ONE BEFORE THE COMMUNITY AUTHORITIES UNDER ARTICLE 85 OF THE EEC TREATY, THE OTHER BEFORE THE NATIONAL AUTHORITIES UNDER NATIONAL LAW .

4 MOREOVER THIS INTERPRETATION IS CONFIRMED BY THE PROVISION IN ARTICLE 87(2)(E ), WHICH AUTHORIZES THE COUNCIL TO DETERMINE THE RELATIONSHIP BETWEEN NATIONAL LAWS AND THE COMMUNITY RULES ON COMPETITION; IT FOLLOWS THAT IN PRINCIPLE THE NATIONAL CARTEL AUTHORITIES MAY TAKE PROCEEDINGS ALSO WITH REGARD TO SITUATIONS LIKELY TO BE THE SUBJECT OF A DECISION BY THE COMMISSION . HOWEVER, IF THE ULTIMATE GENERAL AIM OF THE TREATY IS TO BE RESPECTED, THIS PARALLEL APPLICATION OF THE NATIONAL SYSTEM CAN ONLY BE ALLOWED IN SO FAR AS IT DOES NOT PREJUDICE THE UNIFORM APPLICATION THROUGHOUT THE COMMON MARKET OF THE COMMUNITY RULES ON CARTELS AND OF THE FULL EFFECT OF THE MEASURES ADOPTED IN IMPLEMENTATION OF THOSE RULES .

ANY OTHER SOLUTION WOULD BE INCOMPATIBLE WITH THE OBJECTIVES OF THE TREATY AND THE CHARACTER OF ITS RULES ON COMPETITION . ARTICLE 85 OF THE EEC TREATY APPLIES TO ALL THE UNDERTAKINGS IN THE COMMUNITY WHOSE CONDUCT IT GOVERNS EITHER BY PROHIBITIONS OR BY MEANS OF EXEMPTIONS, GRANTED - SUBJECT TO CONDITIONS WHICH IT SPECIFIES - IN FAVOUR OF AGREEMENTS WHICH CONTRIBUTE TO IMPROVING THE PRODUCTION OR DISTRIBUTION OF GOODS OR TO PROMOTING TECHNICAL OR ECONOMIC PROGRESS . WHILE THE TREATY'S PRIMARY OBJECT IS TO ELIMINATE BY THIS MEANS THE OBSTACLES TO THE FREE MOVEMENT OF GOODS WITHIN THE COMMON MARKET AND TO CONFIRM AND SAFEGUARD THE UNITY OF THAT MARKET, IT ALSO PERMITS THE COMMUNITY AUTHORITIES TO CARRY OUT CERTAIN POSITIVE, THOUGH INDIRECT, ACTION WITH A VIEW TO PROMOTING A HARMONIOUS DEVELOPMENT OF ECONOMIC ACTIVITIES WITHIN THE WHOLE COMMUNITY, IN ACCORDANCE WITH ARTICLE 2 OF THE TREATY . ARTICLE 87(2)(E ), IN CONFERRING ON A COMMUNITY INSTITUTION THE POWER TO DETERMINE THE RELATIONSHIP BETWEEN NATIONAL LAWS AND THE COMMUNITY RULES ON COMPETITION, CONFIRM THE SUPREMACY OF COMMUNITY LAW .

6 THE EEC TREATY HAS ESTABLISHED ITS OWN SYSTEM OF LAW, INTEGRATED INTO THE LEGAL SYSTEMS OF THE MEMBER STATES, AND WHICH MUST BE APPLIED BY THEIR COURTS . IT WOULD BE CONTRARY TO THE NATURE OF SUCH A SYSTEM TO ALLOW MEMBER STATES TO INTRODUCE OR TO RETAIN MEASURES CAPABLE OF PREJUDICING THE PRACTICAL EFFECTIVENESS OF THE TREATY . THE BINDING FORCE OF THE TREATY AND OF MEASURES TAKEN IN APPLICATION OF IT MUST NOT DIFFER FROM ONE STATE TO ANOTHER AS A RESULT OF INTERNAL MEASURES, LEST THE FUNCTIONING OF THE COMMUNITY SYSTEM SHOULD BE IMPEDED AND THE ACHIEVEMENT OF THE AIMS OF THE TREATY PLACED IN PERIL . CONSEQUENTLY, CONFLICTS BETWEEN THE RULES OF THE COMMUNITY AND NATIONAL RULES IN THE MATTER OF THE LAW ON CARTELS MUST BE RESOLVED BY APPLYING THE PRINCIPLE THAT COMMUNITY LAW TAKES PRECEDENCE .

7 IT FOLLOWS FROM THE FOREGOING THAT SHOULD

7 IT FOLLOWS FROM THE FOREGOING THAT SHOULD IT PROVE THAT A DECISION OF A NATIONAL AUTHORITY REGARDING AN AGREEMENT WOULD BE INCOMPATIBLE WITH A DECISION ADOPTED BY THE COMMISSION AT THE CULMINATION OF THE PROCEDURE INITIATED BY IT, THE NATIONAL AUTHORITY IS REQUIRED TO TAKE PROPER ACCOUNT OF THE EFFECTS OF THE LATTER DECISION .

8 WHERE, DURING NATIONAL PROCEEDINGS, IT APPEARS POSSIBLE THAT THE DECISION TO BE TAKEN BY THE COMMISSION AT THE CULMINATION OF A PROCEDURE STILL IN PROGRESS CONCERNING THE SAME AGREEMENT MAY CONFLICT WITH THE EFFECTS OF THE DECISION OF THE NATIONAL AUTHORITIES, IT IS FOR THE LATTER TO TAKE THE APPROPRIATE MEASURES .

9 CONSEQUENTLY, AND SO LONG AS A REGULATION ADOPTED PURSUANT TO ARTICLE 87(2)(E ) OF THE TREATY HAS NOT PROVIDED OTHERWISE, NATIONAL AUTHORITIES MAY TAKE ACTION AGAINST AN AGREEMENT IN ACCORDANCE WITH THEIR NATIONAL LAW, EVEN WHEN AN EXAMINATION OF THE AGREEMENT FROM THE POINT OF VIEW OF ITS COMPATIBILITY WITH COMMUNITY LAW IS PENDING BEFORE THE COMMISSION, SUBJECT HOWEVER TO THE CONDITION THAT THE APPLICATION OF NATIONAL LAW MAY NOT PREJUDICE THE FULL AND UNIFORM APPLICATION OF COMMUNITY LAW OR THE EFFECTS OF MEASURES TAKEN OR TO BE TAKEN TO IMPLEMENT IT .

II - THE SECOND QUESTION

10 IN THE SECOND QUESTION THE KAMMERGERICHT ASKS WHETHER " THE RISK OF ITS RESULTING IN A DOUBLE SANCTION IMPOSED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES AND BY THE NATIONAL AUTHORITY WITH JURISDICTION IN CARTEL MATTERS ... " RENDERS IMPOSSIBLE THE ACCEPTANCE FOR ONE SET OF FACTS OF TWO PARALLEL PROCEDURES, THE ONE COMMUNITY AND THE OTHER NATIONAL .

11 THE POSSIBILITY OF CONCURRENT SANCTIONS NEED NOT MEAN THAT THE POSSIBILITY OF TWO PARALLEL PROCEEDINGS PURSUING DIFFERENT ENDS IS UNACCEPTABLE . WITHOUT PREJUDICE TO THE CONDITIONS AND LIMITS INDICATED IN THE ANSWER TO THE FIRST QUESTION, THE ACCEPTABILITY OF A DUAL PROCEDURE OF THIS KIND FOLLOWS IN FACT FROM THE SPECIAL SYSTEM OF THE SHARING OF JURISDICTION BETWEEN THE COMMUNITY AND THE MEMBER STATES WITH REGARD TO CARTELS . IF, HOWEVER, THE POSSIBILITY OF TWO PROCEDURES BEING CONDUCTED SEPARATELY WERE TO LEAD TO THE IMPOSITION OF CONSECUTIVE SANCTIONS, A GENERAL REQUIREMENT OF NATURAL JUSTICE, SUCH AS THAT EXPRESSED AT THE END OF THE SECOND PARAGRAPH OF ARTICLE 90 OF THE ECSC TREATY, DEMANDS THAT ANY PREVIOUS PUNITIVE DECISION MUST BE TAKEN INTO ACCOUNT IN DETERMINING ANY SANCTION WHICH IS TO BE IMPOSED . IN ANY CASE, SO LONG AS NO REGULATION HAS BEEN ISSUED UNDER ARTICLE 87(2)(E ), NO MEANS OF AVOIDING SUCH A POSSIBILITY IS TO BE FOUND IN THE GENERAL PRINCIPLES OF COMMUNITY LAW; THIS LEAVES INTACT THE REPLY GIVEN TO THE FIRST QUESTION .

III - THE FOURTH QUESTION

12 FINALLY THE NATIONAL COURT ASKS WHETHER, WHEN A PROCEDURE HAS BEEN INITIATED BY THE COMMISSION AGAINST AN AGREEMENT, IT WOULD BE COMPATIBLE WITH ARTICLE 7 OF THE EEC TREATY FOR THE NATIONAL AUTHORITY TO TAKE PUNITIVE ACTION IN RESPECT OF THE SAME AGREEMENT . THIS QUESTION ENVISAGES IN PARTICULAR CASES IN WHICH THE AUTHORITIES OF A STATE WHICH HAVE JURISDICTION IN CARTEL MATTERS ADDRESS THEIR MEASURES EXCLUSIVELY TO THE NATIONALS OF THAT STATE, THEREBY POSSIBLY PLACING THE LATTER AT A DISADVANTAGE IN COMPARISON WITH THE NATIONALS OF OTHER MEMBER STATES WHO ARE IN A COMPARABLE SITUATION .

13 ARTICLE 7 OF THE EEC TREATY PROHIBITS EVERY MEMBER STATE FROM APPLYING ITS LAW ON CARTELS DIFFERENTLY ON THE GROUND OF THE NATIONALITY OF THE PARTIES CONCERNED . HOWEVER, ARTICLE 7 IS NOT CONCERNED WITH ANY DISPARITIES IN TREATMENT OR THE DISTORTIONS WHICH MAY RESULT, FOR THE PERSONS AND UNDERTAKINGS SUBJECT TO THE JURISDICTION OF THE COMMUNITY, FROM DIVERGENCES EXISTING BETWEEN THE LAWS OF THE VARIOUS MEMBER STATES, SO LONG AS THE LATTER AFFECT ALL PERSONS SUBJECT TO THEM, IN ACCORDANCE WITH OBJECTIVE CRITERIA AND WITHOUT REGARD TO THEIR NATIONALITY .

14 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES AND BY THE GOVERNMENTS, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE, AND AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED, A STEP IN THE ACTION PENDING BEFORE THE KAMMERGERICHT, BERLIN, THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

THE COURT

IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE KAMMERGERICHT, BERLIN, BY AN ORDER OF THAT COURT OF 18 JULY 1968, HEREBY RULES :

1 . SO LONG AS A REGULATION ADOPTED PURSUANT TO ARTICLE 87(2)(E ) OF THE TREATY HAS NOT PROVIDED OTHERWISE, NATIONAL AUTHORITIES MAY TAKE ACTION AGAINST AN AGREEMENT IN ACCORDANCE WITH THEIR NATIONAL LAW EVEN WHEN AN EXAMINATION OF THE POSITION WITH REGARD TO THAT AGREEMENT FROM THE POINT OF VIEW OF ITS COMPATIBILITY WITH COMMUNITY LAW IS PENDING BEFORE THE COMMISSION, SUBJECT HOWEVER TO THE CONDITION THAT THE APPLICATION OF NATIONAL LAW MUST NOT PREJUDICE THE FULL AND UNIFORM APPLICATION OF COMMUNITY LAW OR THE EFFECTS OF MEASURES TAKEN OR TO BE TAKEN TO IMPLEMENT IT;

2 . ARTICLE 7 OF THE EEC TREATY PROHIBITS MEMBER STATES FROM APPLYING THEIR LAWS ON CARTELS DIFFERENTLY ON THE GROUND OF THE NATIONALITY OF THE PARTIES CONCERNED, BUT IT IS NOT CONCERNED WITH DISPARITIES IN TREATMENT RESULTING FROM DIVERGENCES EXISTING BETWEEN THE LAWS OF MEMBER STATES, SO LONG AS THESE AFFECT ALL PERSONS SUBJECT TO THEM IN ACCORDANCE WITH OBJECTIVE CRITERIA AND WITHOUT REGARD TO NATIONALITY .